While loan interest for landlords increased by 66% over the past 7 years, rental households jumped by 144%.

In the second quarter of this year, the average monthly interest cost of jeonse households increased by more than 144% in seven years, more than twice the growth rate of owner-occupied households.

As the high interest rate period has arrived and house prices and lease prices continue to rise, it is predicted that the burden of interest costs will continue to increase.

According to the National Statistics Portal (KOSIS) and Household Trends of the National Data Agency on the 18th, the average monthly interest cost for jeonse households in the second quarter of this year (April to June) was 211,965 won, an increase of 125,172 won (144.2%) compared to the second quarter of 2019 when the statistics were revised.

During the same period, interest costs for own households increased by 67,287 won (66.1%) from 101,754 won to 169,041 won.

The rate of increase in interest costs for jeonse households significantly exceeds that for owner-occupied households.

Compared to the same period last year, interest costs for leased households increased by 18.6% and for own households increased by 14.8%.

The interest cost itself was more than 40,000 won more than the jeonse price.

Interest costs include not only home mortgage loans and leasehold loans, but also credit loans, student loans, and credit card overdue interest.

Considering that the sale price is usually higher than the rental price, it is expected that the interest burden for own households will be greater, but it is also possible that rental households may have had a relatively large interest burden to cover living expenses other than housing costs.

Due to the strengthening of home mortgage loan regulations, self-owned households' dependence on loans has decreased and the proportion of their own funds has increased, which may have resulted in a relatively small increase in interest burden.

The rate of increase in interest costs for jeonse households significantly outpaced the rate of increase in income.

The income of jeonse households in the second quarter of this year was 5,685,337 won, an increase of only 3.9% compared to the same period last year. Disposable income, which can be used for consumption expenditures and savings by subtracting non-consumption expenditures from household income, increased by 5.6%.

Compared to 2019, the income of jeonse households increased by 34.1% and disposable income increased by 31.2%.

This is far below the rate of increase in interest expenses.

The ratio of interest expenses to income for jeonse households was 3.7% in the second quarter of this year. It increased by 1.7 percentage points (p) compared to the second quarter of 2019 (2.0%). This means that you are spending about 4% of your income on interest.

The recent rise in rental prices is also a factor increasing the burden on tenants.

According to the Korea Real Estate Agency, in the second week of October (as of the 12th), the rental price of apartments in Seoul increased by 0.18% compared to the previous week, and the increase was wider than the previous week (0.16%). It has risen by 8.55% cumulatively this year.

Apartment sales prices in Seoul also rose by 0.16% in the second week of October, continuing the upward trend for 88 consecutive weeks.